What Is an Estoppel Letter From a Homeowners
Association?
An estoppel letter from a Homeowners Association (HOA),
in this case the Wedgefield Homeowners Association
(WHOA) is an Official Certification of a property owner
or homeowner's financial obligations to the association,
typically they are monthly maintenance fees, special
assessments, fines, etc.

The “entire” Wedgefield Community is a Deed
Restricted community as established and registered with
the State of Florida by the Property Developer. The
Developer transferred the enforcement of the Deed
Restrictions, Rules and Restrictions, and By-Laws to the
main WHOA which is now responsible for implementation
and enforcement.

In the case of the WHOA, which is a “voluntary”
association, a property owners financial obligations
"may" include any fines and/or penalties that have been
assessed against the property as a result of
Architectural Control Committee review fees, any Rules
and Restrictions infractions that may have resulted in fines
and/or penalties, or any WHOA attorney legal
(current or pending) fees. Additionally it is
verification that the WHOA is not in the process of
assigning a Lien or does not already have a Lien placed
against the property.

Estoppel Letter Use:
The normal use of an HOA estoppel letter is when a bank,
Mortgage Company, Lending Institution or Title Company
is considering financing a property purchase and needs
to know how much money the current owner owes to the
association.

Benefits:

Since the
Estoppel Letter shows fees, charges, etc., the bank
can learn if a seller has attempted to make any
unauthorized changes to the residence, such as
remodeling. It will also detail any outstanding
charges to the homeowner.

For the
buyer, the estoppel letter is a "snapshot" of what
is owed on a certain date, so this prevents any
confusion about homeowner association fees that
could arise after the closing.

An estoppel
certificate will contain information with respect to
the common expenses and obligations that the current
owner is responsible for. Other vital information
included is:

Whether the association needs to approve a
new owner.

Upcoming special assessments.

Additional sub-associations (other HOA’s).

It also outlines any existing balances and
violations with respect to the association
Deed Restrictions, Codes & Covenants and
by-laws.

Acquiring this information can be timely and
costly.

Fees and Costs:
The HOA may charge a “reasonable fee” to issue estoppel
letters. A fee of up to $150.00 is generally recognized
as being
reasonable. The Wedgefield Homeowners Association only
charges $50.00 to process an estoppel letter which also
includes the Internal Revenue Service, Form W-9.

To insure a clean transfer of ownership when
purchasing a residence or property, purchasers or
escrow/title agents
should acquire and review an up-to-date HOA Estoppel
Letter also known as ‘Estoppel Certificate’ from the
Homeowners
Association before closing. It appears that, in the
resale market, the estoppel certificate is as important
or equivalent to
the disclosure statement required in the sale of new
homes.